In releasing concrete recommendations to help policy makers revitalize the American economy, Heritage Foundation President Kay C. James, chairman of the National Coronavirus Recovery Commission, offered a much-needed reminder: “The health of our families and the fate of a free, prosperous economy go hand in hand.”
It won’t be easy to accomplish those critically intertwined policy objectives. As Ms. James noted, policymakers must consider reforms that “expand our knowledge of the virus” and “speed up solutions,” but also those that “enable strategic engagement with the rest of the world in trade and travel, and leverage economic freedom for a stronger recovery.”
The U.S. economy had been growing at a dynamic and healthy pace prior to the outbreak of COVID-19. To reboot it, America needs pro-people, pro-market economic policies that will not only fast track economic rebound, but also have long-term positive impact.
In times of uncertainty like the current pandemic, it is natural that people will look to the government for answers. Yet the damage to our economy and our society from more government controls and regulations is real. Unnecessary rules can clog America’s economic arteries, severely hindering vibrant entrepreneurial revitalization at this critical juncture.
Better solutions are possible, and the great American free enterprise system — with its vast marketplace of goods, services and, perhaps most importantly, ideas — is just the institution to provide them. Preserving that system requires continuing commitment to free-market principles. In a time of crisis, economic freedom matters more than ever.
It’s crucial that we maximize economic freedom as we move forward. America must leverage its natural strengths of freedom, civil society, and free enterprise to revive our economic vitality.
Fundamentally, a nation’s capacity to handle pandemics hinges on the quality of its institutions and economic system, as shown by Heritage’s Index of Economic Freedom. For more than a quarter of a century, the Index has measured, country by country, the advances and retreats in economic freedom around the globe. In the process of doing that, the Index has underscored a strong linkage between economic freedom, prosperity, and resilience.
Free-market policies and governing systems promote efficiency and openness while restraining the size and economic reach of government, They also have turned out in practice to advance practical solutions to a wide range of challenges that confront the world.
The Trump administration and Congress should work together to bring about timely regulatory reform, innovative investments, and new trade relationships that not only help bring our economies back quickly but also reinforce the bonds among free-market democracies around the world.
The months ahead present unique opportunities to implement more freedom-oriented economic policies. Policymakers should highlight and communicate why and how free enterprise and civil society can shape America’s effective response to the coronavirus and its economic effects.
Why sap America’s much-needed economic vitality with economic distortions and barriers exacerbated by wasteful government spending, lingering protectionism, and an unjustifiable tax burden on workers and businesses?
Entrepreneurs, particularly small and medium-size businesses, will drive the economic recovery by reopening existing businesses and taking new risks to move things forward. Delivering on policies that will promote economic freedom and dynamism for them is key to making it sure that America’s economic rebound gets on a right track and proceed expeditiously.
During this epidemic, our confidence in economic freedom is being tested. Now is not the time to waver. It is too soon to know how this crisis will play out, but a recurring theme of American history has been resilience and revival. As The Heritage Foundation’s guiding document “True North: The Principles of Conservatism” reminds us,
“America’s economy and the prosperity of individual citizens are best served by a system of free enterprise, with special emphasis on economic freedom, private property rights, and the rule of law. This system is best sustained by policies promoting free trade and deregulation, and opposing government interventions in the economy that distort markets and impair innovation.”
Now is the time for policy makers to act on that guiding conservative principle to facilitate American’s swift and dynamic economic rebound.
• Anthony B. Kim is the editor of the Index of Economic Freedom and research manager in the Center for International Trade and Economics (CITE) at The Heritage Foundation (heritage.org). Terry Miller is the director of CITE and Mark A. Kolokotrones Fellow in Economic Freedom.
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